George Levinger: The myth of American takers versus creators

AMHERST — Republican leaders have claimed that the U.S. is divided between takers and makers. “Takers,” they say, are people who benefit from governmental entitlements such as Medicaid, Medicare, Social Security, unemployment benefits, student loans and food stamps. They are the “47 percent” who pay no income taxes and see themselves as “victims.”

Meanwhile, Republicans, including former Sen. Scott Brown, describe themselves “job creators” and imply they would do much more if they weren’t held back by “high taxes and government regulation.” The facts suggest a quite different story.

First, everyone in our country does pay some taxes, including sales and other local taxes. And if people are fortunate enough to have jobs they pay payroll taxes; for many low-wage people, payroll taxes take a greater percentage of their income than the taxes paid by some wealthy persons.

The average annual tax cut given early in the Bush administration to the wealthiest 1 percent of Americans ($66,384) was greater than the average household income of the other 99 percent of Americans ($58,506), as computed by the National Priorities Project in Northampton.

Second, almost everyone in this country is a “taker” who benefits from government programs. In a 2008 Cornell University survey of 1,400 Americans, 57 percent replied that they had never “used a government social program.” But when asked whether they had availed themselves of any of 21 different federal policies (Social Security, unemployment insurance, the mortgage-interest deduction, or student loans) 96 percent of those who had denied using programs had benefitted from at least one; the average respondent had used four.

Third, did the Bush-era tax cuts for the wealthy really create jobs? Most certainly not. According to the U.S. Bureau of Labor Statistics, during Bush’s eight years in office, the average annual job growth was near zero. By the end of his presidency, and months after, the economy was losing 750,000 jobs a month. Our “job creators” had used automation and overseas outsourcing to destroy rather than create many American jobs.

In recent years, the severe budget cuts insisted on by GOP House majorities have reduced federal aid for public education, public safety and many other domestic programs. Ironically, those jobs cost, on the average, only 40 percent of the defense-related jobs which the GOP insists on funding.

Conversely, during the same period, the wealth of the top 0.1 percent of mega-millionaires rose sharply. Not only did they benefit from cuts in income and capital gains taxes, but many large corporations (including oil, large defense contractors and agriculture companies) were subsidized by the federal government. Indeed, they are the biggest “takers” in our economy.

Consider one final irony. Compare the amount of taxes Americans pay the government with what they receive back from federal assistance programs. On average, individuals in “red” states, dominated by Republican politicians, have received direct payments worth 107 percent of the taxes they paid, according to the National Priorities Project. Citizens in “blue” states who voted for Barack Obama have received only 83 percent.

George Levinger is a retired psychology professor from the University of Massachusetts.